Important Things To Know About Bankruptcy And Divorce
When you are considering the possibility of filing for bankruptcy in the St. Petersburg area and you are also considering divorce, you are likely wondering if you need to plan one around the other. In other words, should you be planning to file for bankruptcy before divorce, or divorce before bankruptcy? Does it matter? These are important questions to consider, and our St. Petersburg bankruptcy lawyers want to provide you with some information that can help you. The following are some important things to know about bankruptcy and divorce in Florida.
Whether or Not You Are Planning Joint Petition Will Impact Your Decision
Under the U.S. Bankruptcy Code, married spouses can either file for bankruptcy together in a joint petition, or just one of the spouses can file for bankruptcy. If you are planning to file a joint petition for bankruptcy, you will want to file for bankruptcy before you get divorced. Once you are divorced, you will not be able to take advantage of doubled exemptions for married spouses and will not be eligible for a joint petition. In other words, whether or not you are planning to file a joint petition will impact your decision about whether to file for bankruptcy before or after your divorce.
Type of Bankruptcy Will Affect Your Plans
The type of bankruptcy you are planning to file for will also most likely affect your bankruptcy and divorce plans. In general, Chapter 13 bankruptcy cases last significantly longer than Chapter 7 cases, and it might not make sense to file for Chapter 13 bankruptcy when a divorce is imminent. With a Chapter 7 case, it can often be beneficial to file for Chapter 7 bankruptcy before your divorce because non-exempt assets will be liquidated and will not need to become part of your divorce case. Accordingly, going through a Chapter 7 bankruptcy before a divorce can often allow the divorce process to be easier.
You May Need to File for Bankruptcy First
In situations where you are planning to file for Chapter 13 bankruptcy and you are also planning to get divorced, you will most likely need to file for bankruptcy first. Given that Chapter 13 bankruptcy will require you to develop a repayment plan that will last from three to five years, you will need to complete the terms of that plan in most cases before you can get divorced. Since a divorce court will need to divide any marital assets between the spouses, it will not be able to divide assets that are part of a Chapter 13 repayment plan, regardless of whether the parties have filed a joint petition or just one of the spouses has filed for bankruptcy.
While it is possible to file for Chapter 7 bankruptcy before or after getting divorced, like we mentioned above, filing for bankruptcy first will usually make the divorce process go quicker.
Contact Our St. Petersburg Bankruptcy Attorneys
If you have questions about filing for bankruptcy when you are also making divorce plans, it is critical to seek legal assistance from a bankruptcy attorney. One of the experienced St. Petersburg bankruptcy lawyers at the Law Offices of Stephen Barszcz can speak with you today about your circumstances and can help you to initiate your bankruptcy case.